Formosa International Hotels Corporation to Acquire Regent Luxury Hotel Business

Carlson, a privately-held, global hospitality and travel company, and publicly-held The Rezidor Hotel Group AB announced on Friday that they have entered into a definitive agreement with Formosa International Hotels Corporation (FIHC) under which FIHC will acquire the Regent luxury hotel business. The master purchase agreement for the transaction includes customary conditions, which are expected to be fulfilled within the next month.

The Regent brand is owned by Carlson and its subsidiaries, which globally operates and licenses the Regent brand, including hotels, residences and cruise ships. In 2003, Carlson expanded its relationship with Rezidor under a separate master franchise agreement to include the development rights for Regent in Europe, the Middle East and Africa. The acquisition by FIHC includes the sale of the global Regent brand and all associated intellectual property, the hotel management and lease contracts for properties in operation and under development, and the Regent Seven Seas Cruises license.

Transitional agreements are in place whereby Carlson will continue to provide reservations and other services to the existing Regent network and Rezidor will continue to provide management services for Regent Hotels in Europe, the Middle East and Africa and maintain their current relationship to hotel owners.

The transaction will provide Rezidor with a positive impact on cash flow and profit. Rezidor's share of the transaction proceeds amounts to a cash consideration of approximately MEUR 9.5. The sale of this part of Rezidor's business will have an annual positive effect of MEUR 2 to 3 on Rezidor's EBITDA in the foreseeable future.

"In addition to the positive impact on annual cash flow and net profit, this deal will also free up resources to improve our operations and accelerate the expansion of Rezidor's core brands. After a careful consideration, we came to the conclusion that Formosa provided an excellent fit to Regent's future. They are exclusively focussed on the luxury hotel segment, and are committed to growing the brand internationally," said Kurt Ritter, President and Chief Executive Officer of The Rezidor Hotel Group.

Reported by:  Minnesota Business